A battered Nick Clegg will deliver on one of his party's central manifesto promises tomorrow when he announces a pupil premium for 1 million disadvantaged children likely to be worth £2.5bn by the final year of the parliament.

The announcement will give Clegg some badly needed political respite after he was forced earlier this week to tear up his party's manifesto commitment to abolish university tuition fees, and instead to back proposals to allow them to double.

Trailing what is likely to be one of the few pieces of good news in next week's spending review, he will announce "a fairness premium" worth cumulatively £7bn over the whole of the parliament. It is understood the pupil premium element aimed at schoolchildren will cumulatively amount to £5bn, and be worth £2.5bn annually by the end of the parliament.

He will claim the package had represented the Liberal Democrats' red line in the spending negotiations.

His remarks come as Kenneth Clarke, the justice secretary, warned for a second time in a fortnight that Britain could yet tip back into recession.

In unscripted remarks to the Prison Governors Association, he said the world faced a "grave danger of financial collapse" and the UK was "not out of the woods" yet. "There is an extremely serious financial crisis," he said.

Clarke said the UK had rescued itself at the moment, but added: "If we fail to deliver with the [comprehensive spending review] programme we're going to set out, we'll be back there all too soon."

He said the review (CSR) would be "quite the most dramatic in living memory". He added: "There's no one alive who remembers a crisis of this kind. It is not the usual public spending squeeze."

The £7bn fairness package, drawn up in lengthy negotiations with the Treasury, will have three main elements:

• All disadvantaged two-year-olds will have an entitlement to 15 hours a week of pre-school education, in addition to the 15 hours already available to those aged three and four. The cash will go to the poorest 20% of children.

• A pupil premium to help poorer pupils wherever they live in the country. Schools will receive additional funds to offer targeted help to every pupil eligible for free school meals and reduce educational inequalities. The vast bulk of £7bn fairness premium – roughly £5bn – will be devoted to the pupil premium. Schools will be entitled to spend the money as they see fit, for instance on catch-up classes for struggling pupils. Currently, funding is directed towards areas of disadvantage but is spread out evenly across the schools in that area.

• A form of student premium designed to remove barriers to poor children going to university, over and above bursaries already in existence. "We must make sure that bright but poor children grow up believing that a university education is not out of reach," Clegg will say.

This higher education element of the package will be spent on either improved maintenance grants or free tuition years.

Details of the student funding, likely to be worth less than £1bn, will not be announced tomorrow; this will await the broader government response to Lord Browne's report on the future of university funding.

Clegg will argue tomorrow: "The spending review is a difficult process. As a government, and as individual ministers, we need to be able to look ourselves in the mirror and know we did the right thing, even when – especially when – it is a hard thing. There's been lots of talk of 'red lines' in the CSR process. It should be obvious from what I've said today that the reddest line of all is the one around our commitment to their future."

Government sources did not disclose tonight the source of the funding for the fairness premium, saying this will await the spending review next week, but some of the funding inevitably will come from cuts in other parts of the wider education budget.

With his party at 11% in a YouGov poll this week, and braced for worse, Clegg will insist the pupil premium deal represents a real victory for the party.

He will say: "You cannot overestimate the transformative nature of this kind of investment."

The decision to put some of the extra money into early years for the disadvantaged follows work submitted to government by the new poverty adviser, Frank Field, who has urged the coalition to make the first five years the top priority.

In a speech tonight he urged the government to spend less money on child tax credits – an extra £1.2bn was spent in the budget – and instead put money into children's centres.

He said "Does anyone believe that these modest increases in tax credits for individual families, but at huge collective cost to taxpayers, will have a marked impact on the life chances of poorer children? I don't."